SAN DIEGO COURTS –
A week after voters decided to toss him out of office, City Attorney Michael Aguirre was handed a setback yesterday in his signature lawsuit to roll back pension benefits, but he scored a win in a second lawsuit.

In a brief order, the 4th District Court of Appeals in San Diego said Aguirre's appeal in a complex and contentious case to take away millions in pension benefits was premature.

The court said legal claims in the case have to be resolved before an appeal can be considered.

Later in the day, a Superior Court judge handed Aguirre a pension-related victory in a separate lawsuit. The ruling by Judge William Nevitt Jr. means the city may not have to pay about $40 million to cover additional service years that city workers bought at a discount to boost their pensions.

Aguirre has been battling the San Diego City Employees' Retirement System and labor unions in court over pensions benefit granted in 1996 and 2002. He contended that they were illegal because pension board members violated state conflict-of-interest laws and because the benefit increases violated the state's debt-limit law.

In December 2006, Superior Court Judge Jeffrey Barton threw out the guts of Aguirre's case, concluding that earlier settlements by the city in other pension-funding cases meant the city could not now take away the benefits.

In 2007, Barton dismissed the rest of the city's case. At that point, the city appealed. But left unresolved in the suit were several counterclaims from the pension system against the city.

Lawyers for the system filed motions in the appeals court more than a year ago, arguing that the appeal had to be dismissed because the case was not final. They said they asked the city to drop the appeal at that time, but were rebuffed.

Yesterday, the court agreed with the pension system's attorneys. The matter now heads back to the trial court, where its fate is unclear.

Jan Goldsmith, who defeated Aguirre in the Nov. 4 election, has been critical of Aguirre's approach and the appeal. He has said he would leave it up to the City Council – also largely hostile to the lawsuit – to decide its future.

Goldsmith could not be reached for comment yesterday.

The appellate court ruling marked the latest – and with his upcoming departure from office in December, perhaps the last – setback in Aguirre's long and largely unsuccessful campaign to undo pension benefits for city workers.

But at a news conference yesterday, Aguirre declined to answer questions about whether he viewed the ruling as a rebuke to his legal approach over the past four years or if he thought the past year of litigation had been a waste.

Instead, he criticized Mayor Jerry Sanders and the City Council for how they have handled the pension deficit, which a city actuary said at a meeting Wednesday is now $2.7 billion.

He also said the remaining parts of the case would have to go to trial, and that he would go to court to set a trial date soon.

Lawyers for the pension system did not respond to several requests for comment. David Strauss, who represented a group of city employees in the case, said the ruling was “another example of so much wasted time and energy on this case.”

In the case before Nevitt, the pension system allowed employees in 2003 to buy up to five years of service credits at rates that did not factor in the costs associated with new benefits. The ruling set aside a pension board vote authorizing the city to cover the shortfall.

“That's the way the law is,” Aguirre said of the two legal outcomes. “The law can be schizophrenic, and that's what happens in complex litigation.”